ES Daily Plan | January 24, 2025
My preparations and expectations for the upcoming session.
For new followers: The yellow levels highlighted at the bottom left of the chart are the primary levels that I focus on intraday. My strategy for preventing impulsive decisions at unfavorable locations involves following a simple yet effective rule of exercising caution when initiating trades outside of the yellow levels. This implies that I am cautious chasing longs above the final yellow upside target and shorts below the final yellow downside target. It is crucial to understand that refraining from chasing a trade is not an automatic invitation to initiate a trade in the opposite direction.
Visual Representation
Contextual Analysis
Wednesday’s late-session weakness extended into the overnight session, with the market testing the initial downside target at 6100, where buyers emerged (ONL: 6101.50). The entire overnight session traded below yesterday’s value area, which would typically suggest potential weakness; however, buyers had other plans during the RTH session.
The RTH session opened within yesterday’s A-period excess, and the initial balance (the first hour of RTH) traded within a notably small range of just 8 handles. For those unfamiliar with my TPO charts, the initial balance range is always highlighted by a white vertical line along the daily profiles. Trading for an hour below Wednesday’s value area without breaking Wednesday’s low, which formed a weak low, signaled a lack of stronger sellers. Once buyers gained traction within the value area, the potential for further weakness quickly diminished, underscoring the strength of this daily imbalance phase to the upside. The initial upside target at 6133 provided some resistance throughout the session; however, buyers ultimately managed to push higher into the closing session, coming within 6 handles of the Weekly Extreme High at 6160, where the non-back-adjusted ATH at 6163.75 is also located. Buyers have successfully shifted the 5D VPOC (short-term value) higher from 5986 to 6130—value continues to follow price.
As discussed yesterday: The structure left below during this imbalance phase is extremely poor, with three true gaps and four daily naked (untested) volume point of controls (NVPOC). A market that shows no inclination to clean up poor structure is not one you'd want to fight against. Let sellers show us something first, such as breaking the pattern of higher lows.
The early failure to break the pattern of higher lows on the daily chart was quickly capitalized on by buyers today, allowing for continued price exploration higher, now approaching the non-back-adjusted ATH at 6163.75. The immediate attention now is on monitoring the highlighted closing spike in the M-period.
In terms of levels, the Smashlevel is at 6139, marking today’s spike base. Holding above this level signals strength, targeting the ATH (non-back-adjusted) at 6163.75. Acceptance above 6163.75 would then target 6185, with a final target at 6200 under sustained buying pressure. Conversely, failure to hold above 6139 would target the afternoon pullback low at 6125, with a final target at the weak low at 6111 under sustained selling pressure.
Levels of Interest
Going into tomorrow's session, I will closely observe the behavior around 6139.
Holding above 6139 would target 6160-63 / 6185 / 6200
Break and hold below 6139 would target 6125 / 6111
Additionally, pay attention to the following VIX levels: 15.84 and 14.22. These levels can provide confirmation of strength or weakness.
Break and hold above 6200 with VIX below 14.22 would confirm strength.
Break and hold below 6111 with VIX above 15.84 would confirm weakness.
Overall, it's important to exercise caution when trading outside of the highlighted yellow levels. A non-cooperative VIX may suggest possible reversals i.e trade setups.
Weekly Plan
Make sure to review the Weekly Plan, which provides a broader perspective and highlights key levels of interest to observe in the upcoming week.
Thanks! It looks like taking Friday off might not be a bad idea!
Thank you!